Pound Set for Monthly Gain Versus Dollar as House Prices Rebound
The pound was set for a monthly gain against the dollar as a report showed U.K. house prices rose in August, easing concern that the recession is worsening.
Sterling strengthened versus its U.S. counterpart in August amid speculation the Federal Reserve will extend its asset purchase program. The average cost of a home increased 1.3 percent from July, the biggest monthly gain since January 2010, the Swindon, England-based customer-owned lender said today. A separate report showed U.K. consumer confidence was unchanged in August. An index of sentiment stayed at minus 29, London-based research group GfK NOP Ltd. said.
The pound was little changed at $1.5788 at 8:13 a.m. London time, headed for a gain this month of 0.7 percent. Sterling was at 79.23 pence per euro, poised for a monthly loss of 1 percent, the most since June 2011.
Fed Chairman Ben S. Bernanke is due to speak in Jackson Hole, Wyoming, today where he may discuss his assessment of the need for more monetary stimulus in the U.S.
Britain’s currency has gained 1.1 percent this year, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-market currencies. The dollar fell 0.7 percent and the euro declined 4.5 percent.
The 10-year gilt yield was little changed at 1.45 percent.
U.K. government bonds have returned 4.4 percent this year through yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. German bunds gained 4 percent and U.S. Treasuries earned 2.3 percent.
To contact the reporters on this story: Lukanyo Mnyanda in Edinburgh at email@example.com